5 Things You Need to Know About Donald Trump's Debt

During Monday’s presidential debate at Hofstra University, Hillary Rodham Clinton claimed Donald Trump had over $650 million in debts to various banks—suggesting it was one reason Trump hasn’t yet released its taxes. Trump responded by suggesting the amount was far less and that he’d be willing to name his creditor banks—while reiterating he’ll release his taxes when Hillary release the rest of her emails.

Here is Fortune’s examination of Trump’s debts, original published last month:

Over his long career, Donald Trump has frequently stumbled by amassing mountainous debt. Excessive borrowing forced him to the brink of personal bankruptcy in the real estate depression of the early 1990s, and his Atlantic City casino company sank under a $2 billion junk bond burden in 2006.

Although Trump has never confessed to abusing debt—”I’ve done great with debt,” he’s bragged—his recent statements on the subject strongly suggest that he’s reformed. The real estate mogul has been claiming for months that his empire carries “very little debt” and that his expertise in navigating the shoals of over-borrowing make him the ideal choice to solve America’s looming debt crisis. “I understand debt better than probably anybody,” Trump declared in May, “but you know, debt is tricky and it’s dangerous, and you have to be careful and you have to know what you’re doing.”

So how much debt does Trump hold now? Has he conquered the leverage curse, or is it still a major threat?

On August 20, The New York Times published a detailed analysis of Trump’s borrowings, which concluded that companies he owns have at least $650 million in debt. This writer also has been assessing the true size of Trump’s net worth and debt over the past several months. A thorough examination reveals Trump has over $1 billion in debt—a lot more debt than either he specifically disclosed, or almost anyone else has calculated.

The good news for Trump is those big borrowings are backed by so much value and income that, believe it or not, they aren’t a problem. The other news is that looking at Trump’s holdings through the prism of debt shows once again that he’s not nearly as rich as he claims.

Here are the 5 Things You Need to Know About Donald Trump’s Debt:

1. Donald Trump Has Joined the Billion-Dollar Debt Club

The NY Times analysis spells out the mortgage loans outstanding on around 18 major properties that constitute almost all of Trump’s holdings, and is far more complete and specific than what can be concluded, for example, from his filings with the Federal Election Commission. On some of the properties, Trump holds 100% ownership either in the land and buildings, or long-term ground leases that are comparable to full ownership. For example, he owns 100% of 40 Wall Street, an office tower in Manhattan, as well as Niketown (nke), the footwear purveyor’s flagship store adjacent to Trump Tower. But Trump also has a share of many big mortgages on properties where he’s a partner, notably 1290 Avenue of the Americas in Manhattan, and 555 California Street in San Francisco. The NY Times identified the loans on these properties, but didn’t break out the pro-rata shares of the debt that Trump is responsible for to get a fully tally of his obligations.

To calculate a grand total of Trump’s debts, I added together the debt on the 100%-owned buildings plus Trump’s share of the mortgages on the partnership properties.

The Grand Total: $1.11 billion.

2. Trump’s Debt Is Concentrated In ‘Trophy’ Buildings

The core of Trump’s holdings are five buildings, three in Manhattan, one in Washington, D.C., and a fifth in San Francisco. In fact, Trump fully owns, or is a major partner in, surprisingly few big properties, a problem if you’re trying to justify a $10 billion-plus net worth.

Trump owns shares in his two biggest and best office buildings, 1290 Avenue of the Americas and 555 California Street, via a limited partnership with Vornado Realty Trust (vno). Those buildings—featuring 3.8 million square feet of space and top rental clients—carry a total of $1.54 billion in mortgages. As a 30% limited partner, Trump is effectively responsible for $462 million of that principal, and a pro-rata share of the interest payments.

The mortgage on 40 Wall Street is $157 million, and Trump owes $100 million on Trump Tower, where he owns around 13 stories of offices as well as retail space encompassing the ornate atrium where he announced his candidacy. The fifth commercial property is the former Old Post Office building a few blocks from the White House. Trump is transforming this ornate 1899 landmark into the 275-room Trump International Hotel. (The federal government has granted Trump a 60-year lease on the land, costing Trump $3 million a year.) The amount outstanding on the construction loan is $127 million.

In sum, no less than $846 million of Trump’s $1.11 billion borrowings are owed on those five properties, or almost 80 cents of every dollar in debt, using the best estimates of the liability side of his balance sheet.

3. Trump’s Debt Is a Lot Bigger Than People Thought

The Federal Election Commission requires that candidates disclose their debt on companies in which they hold a 100% ownership. They can express those amounts in a broad range, and are not obligated to reveal borrowings on properties in which they own a partial interest. In his most recent FEC report, Trump listed 16 100%-owned properties, and gave the mortgage amounts as between a minimum of $415 million and a maximum of at least $650 million. The “at least” occurs because many of the loans, including those on Trump Tower and 40 Wall Street, are listed only as “over $50 million.”

Naturally, the FEC filing doesn’t provide a full accounting because the partnership properties are excluded, as permitted by the guidelines. Put simply, Trump’s FEC information meets the requirements, but the $415 million to $650 million range is so broad that observers could reasonably think Trump’s debt load falls well below $1 billion.

The impression is similar from a Trump balance sheet—yes, an actual balance sheet!—issued in a June 2015 press release. To put it mildly, the total debt amount is hard to calculate. The “liabilities” section lists borrowings of $503 million. But under “Real Properties owned less than 100% by Donald J. Trump,” the tycoon states that those partnership holdings, including the Vornado buildings and two far smaller holdings, are worth $943 million “net of debt.”

We have a good idea of the market values of the properties––dominated by the two Vornado buildings. According to an estimate cited in TheNY Times, they’d sell for $3.7 billion, putting Trump’s share at $1.1 billion. His shares in the two others are worth about $100 million, for a total of $1.2 billion. So if his equity is $943 million, you’d think he’d owe around $250 million on them ($1.2 billion minus $250 million = equity of approximately $950 million.)

In fact, we know that his share of the mortgages on those properties totals more like $500 million, including $462 million on the Vornado buildings, based on his 30% limited partnership and pro-rata share of the interest payments. Hence, after reading this balance sheet, you could be forgiven for thinking that Trump had $750 million in debt (the $503 million on 100% owned buildings plus $250 million on the partnership holdings), instead of the actual number of $1.11 billion. That’s why the billion-plus figure is a big surprise.

4. Trump’s Debt Really Isn’t a Problem

Consider that Trump’s average interest rate is probably less than 5%, so his total annual payments on those mortgages is a maximum of $60 million. His rental revenue after management costs and capital expenditures is far, far larger than that. The best example is his biggest holding, the 30% interest in 1290 Avenue of the Americas and 555 California Street, in partnership with majority-owner and general partner Vornado.

From examining Vornado’s 10K, and applying market rents, Fortune estimates that two buildings generate combined EBITDA of $150 million. Deduct interest expense of around $60 million (the rate on the 1290 loan is just 3.3%), and cap-ex of $30 million, and the free cash flow comes to $60 million. Trump’s share: Approximately $18 million a year, pure cash he can put in his pocket. Trump also has received around $225 million in debt-free funds from re-financings on the two buildings as rental rates, and market values, have soared.

That’s hardly excessive leverage; in fact, just the opposite. Once again, The NY Times cites a firm estimating the pair’s market value at $3.7 billion. That sounds high; my estimate in previous articles was $3.1 billion. But even at the lower number, since 1290 and 555 are carrying $1.54 billion in mortgages (Trump’s share is 30% or $462 million), their total debt is only 50% of what an outside buyer would pay for them.

That kind of leverage is extremely prudent. And keep in mind that those two buildings alone account for 42% of all Trump’s debt.

It’s the same story with Trump Tower and 40 Wall Street: The rental incomes, after expenses and cap-ex, are far larger than the interest payments.

5. Trump Sure Is Rich—But Not That Rich

Trump didn’t argue much with The NY Times story’s numbers. Instead, he declared, “If the value is $11 billion, it’s a very small amount of debt. I have very little debt relative to my assets. I have massive assets.” In other words, Trump is reaffirming that he’s worth $10 billion or so. Indeed, if his holdings and capitalized royalty income are really worth $11 billion, and his debt stands at just over $1 billion, then he’s really worth $10 billion

But recognizing that Trump’s big borrowings are concentrated on just five properties raises a nettlesome question about the mogul’s epic claims. In reality, Trump owns, or owns portions of, just a few major properties, though what he does own are trophies. If you take a reasonable estimate of the value of his holdings, and put a likely multiple around 15 on his recurring royalty profits, you don’t get too far over $4 billion. Subtract $1.11 billion in debt, and you’re somewhere in the $3 billion range. as Fortune previously estimated.

Trump might unearth an old real estate joke, “I must be rich, because I owe millions,” only substituting “I must be filthy rich because owe a billion.” Trump has made some great investments. But he hasn’t made nearly enough of those great investments to reach the eleven-figure mark that’s supposedly defines his YUGE accomplishments as an entrepreneur.

In any case, debt is no longer a problem for Donald Trump. And given his past disasters, that’s a triumph in itself.

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